As Netflix approaches its first-quarter earnings announcement, it finds itself in a markedly stronger strategic position than it did just a few months ago. Investors are refocusing on core business fundamentals following several pivotal decisions, as highlighted by eToro’s market insights.
Josh Gilbert, a Market Analyst at eToro, noted that Netflix’s decision to abandon the Warner Bros. Discovery acquisition in March has lifted a significant burden from investors’ minds. The renewal of its share buyback plan and recent price hikes in the U.S. have also greatly influenced market sentiment regarding the stock.
“Netflix enters this earnings season with a clearer narrative,” Gilbert stated. “With the Warner deal off the table, investors can now concentrate squarely on fundamentals and growth drivers.”
The company anticipates Q1 revenue of US$12.16 billion, representing year-over-year growth of roughly 15%, alongside expected earnings per share of US$0.76. For the entire year, Netflix forecasts revenue between US$50.7 billion and US$51.7 billion, with an operating margin poised to rise from 29.5% in 2025 to 31.5%.
Gilbert mentioned that Netflix’s previous earnings report fell short of analyst expectations, particularly regarding future guidance, putting additional pressure on the upcoming results.
“With US$20 billion allocated for content this year, there is considerable scrutiny on whether Netflix can maintain growth without compromising profitability,” he noted.
Investors will be particularly interested in Netflix’s advertising business this quarter. After surpassing 325 million subscribers last quarter, the company saw its advertising revenue more than double in 2025, reaching around US$1.5 billion. This figure is projected to double once again to US$3 billion this year.
“Advertising is swiftly becoming a vital second revenue source for Netflix,” Gilbert explained. “If Q1 results demonstrate that the ad-supported tier is performing well, it will strengthen the argument that Netflix can achieve higher-margin growth beyond subscriptions.”
With the Warner deal now behind it, the buyback program actively running, and a rapidly expanding advertising business, Gilbert believes Netflix has a prime opportunity to solidify its leadership in the streaming industry.
“This is a crucial quarter for Netflix to reaffirm to the market why it remains at the forefront of the streaming landscape,” he concluded.
